HARPER'S PICTORIAL LIBRARY OF THE WORLD WAR

HARPER'S PICTORIAL LIBRARY OF THE WORLD WAR

Vol. 12—Harper's Pictorial Library of the World War

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Copyright, 1920, by Harper & Brothers
Printed in the United States of America
M-U

CONTENTS OF VOLUME XII PAGE Introduction Professor Irving Fisher vii PART I I. Economic Results of the War 1 II. Wartime Food and Price Problems 34 III. Industry and Labor in Wartime 65 IV. Government Control 87 V. The Money Cost of the War, Edwin R. A. Seligman 105 VI. American Business in the War, Grosvenor B. Clarkson 115 VII. The Liberty Loan Army, Guy Emerson 126 VIII. Food and the War, Vernon Kellogg 135 IX. The High Cost of Living, Director of the Council of National Defense 142 PART II I. The Peace Conference at Work, Thomas W. Lamont 149

href="@public@vhost@g@gutenberg@html@files@44213@[email protected]#Page_163" class="pginternal" tag="{http://www.w3.org/1999/xhtml}a">II. Wilson's Fourteen Points 163 III. How the Peace Treaty Was Signed 165 IV. The Peace Treaty—Its Meaning to America, George W. Wickersham 170

THE TREATY OF VERSAILLES AND THE COVENANT OF THE LEAGUE OF NATIONS

Preamble 179 Part I. The Covenant of the League of Nations 182 Part II. Boundaries of Germany 186 Part III. Political Clauses for Europe 188 Part IV. German Rights and Interests Outside Germany 206 Part V. Military, Naval, and Aerial Clauses 209 Part VI. Prisoners of War and Graves 216 Part VII. Penalties 217 Part VIII. Reparation 217 Part IX. Financial Clauses 226 Part X. Economic Clauses 229 Part XI. Aerial Navigation 246 Part XII. Ports, Waterways, and Railways 247 Part XIII. Labor 255 Part XIV. Guarantees 261 Part XV. Miscellaneous Provisions 262 Rejection of the Peace Treaty 264 The Reservations Which Failed 269

href="@public@vhost@g@gutenberg@html@files@44213@[email protected]#Page_271" class="pginternal" tag="{http://www.w3.org/1999/xhtml}a">Peace by Congressional Enactment Fails 271 The Map of Europe Remade 279 Our Part in Winning the War 280 Index Text 291 Illustrations 363 I. Portraits 363 II. General 368 Maps 383

ILLUSTRATIONS IN THIS VOLUME

A Soldier of the Soil Frontispiece Price Movements of the United States and England from the Earliest Index Numbers Through the First Years of the World War viii Trend of Prices Before and After the Great Wars of History ix William McAdoo xi Money and the Price Level xii John Pierpont Morgan xiv President Wilson and Rear Admiral Grayson Passing the Palace of the King in Brussels xvii Women Munition Workers in the International Fuse and Arms Works 3 Poster for Boy Scouts Who Worked for the Victory Loan 7 Dropping the First Bomb 10 A Poster Used During the Fourth Liberty Loan Campaign 14 Detroit—City of Automobiles 17 A Woman Doing Road Construction Work 20

A Woman Operating a Multiple Spindle Drill in an English Shell Factory 23 Launching the Quistconck at Hog Island 26 Ship-building at Camden, N. J. 30 Diagram Showing the Effect of the War on the Prices of Stocks 33 Centres of Live Stock Production Throughout the World 36 Members of "The Women's Land Army" in England 41 A Map Issued by the Food Administration to Show Food Conditions in Europe After the Signing of the Armistice 43 A Food Riot in Sweden 46 Harry A. Garfield 49 Drying Fruit and Vegetables to Save Tin and Glass 52 "Back on the Farm" 54 The Nations and Their Wheat Supply 59 A Municipal Canning Station 61 In the Heart of the Bethlehem Steel Plant 67 Forging Armor Plate 70 Building Howitzers 73 Guns and Armaments for United States and Her Allies 74 Plowing by Night 76 A War Time Warning 81 Women Workers in America 84 Samuel P. Gompers 87

tag="{http://www.w3.org/1999/xhtml}a">Walker D. Hines 90 Building a Steel Ship in Seattle, Washington 93 Hog Island Ship-building Yards 94 Launching the City of Portland on the Columbia River, near Portland, Oregon 96 Examining Cargoes for Contraband 99 An Antidote for the Submarine Pest 102 The Awkward Squad 104 The Economic Conference in Paris 106 Lord Reading 110 While the Men Fought, Those Left Behind Bought Bonds 112 French School Children Waiting to Welcome General Pétain 114 United States Council of National Defense and Its Advisory Commission 117 Bernard M. Baruch 119 Daniel Willard 122 John D. Ryan 125 A Poster Used During the Fourth Liberty Loan Campaign 128 A Poster for the Third Liberty Loan Campaign 131 Victory Way at Night 133 The Battle Scene at Home 137 A Community Conference on Food-Saving 140 Will There Be Enough to Go Around? 144 Women Doing Night Farming

class="numeric">147 The Ore Market—Cleveland 148 David Lloyd George 151 President Poincaré With the Swiss President, M. Gustave Ador, Driving to the Peace Conference in Paris 154 Where the Peace Treaty Was Signed 157 Awaiting the Decision of the German Peace Delegates. 160 The George Washington 162 Paris Crowds Greeting President Wilson 164 Henry White 167 Count von Brockdorff-Rantzau 169 Victoria Hall at Geneva 172 William Howard Taft 176 Woodrow Wilson, President of the United States 181 President and Mrs. Wilson Waving Good Bye 187 President Wilson's Welcome in Paris 193 Sir Eric Drummond 202 Lord Robert Cecil 207 Berlin Demonstrations Against The Peace Treaty 214 German Press Representatives in Versailles 220 Dreadnoughts Welcoming President Wilson Home 227 M. Stephen Pichon 233 Henry Cabot Lodge

class="pginternal" tag="{http://www.w3.org/1999/xhtml}a">239 America's Peace Capitol in Paris 245 The White Flags That Meant Defeat for the German Cause and Marked the Beginning of the End of the War 251 Paris in War Time 258 Senator Philander C. Knox of Pennsylvania 274 Male Population Registered and Not Registered 281 Comparative Losses of Merchant Shipping During the War 282 Production of Training Planes and Engines to the End of Each Month 286 Number of Battle Aeroplanes in Each Army at the Date of the Armistice 287 Our Flag in Alsace 288 Secretary of War Baker Drawing Registration Numbers 289

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INTRODUCTION
By PROFESSOR IRVING FISHER

Department of Political Economy, Yale University

In various ways, as this volume shows, the war has profoundly affected our economic and political life. War has ever been a disturber and innovator, always leaving after it a different world from that which existed previous to it. On account of our tremendously complex economic organization—the specialization of industry among nations, and the network of commerce—war today causes more profound changes than ever before. There can not be a human being in the world today whose life is not altered by the war through which we have just passed.

In trying, now that the war is over, to stop drifting, and to think our way out of the bent (or broken) remains of the ante bellum life, the world is confronted by a maze of problems and a still greater maze of proffered solutions.

Many of these proposals are, unfortunately, of the nature of treatment directed not at fundamental conditions, but merely at symptoms. We should be past the stage, in our social science, as we are in medicine, where we treat symptoms without a thorough diagnosis of the fundamental causes.

And yet it is just this thorough diagnosis that we lack.

What, then, are the changes brought about by the war which most deeply affect "the body politic," and by meeting which the most far reaching improvements can be made?

HIGH COST OF LIVING A VITAL QUESTION

I can not take up, or even touch on, all of them; but to one of them I wish to call especial attention—the High Cost of Living or, more generally, the high level of prices, which is the most striking economic effect of the war throughout the world. It is, as I see it, hard to over-emphasize the need for attacking this problem of the price level as a preliminary to attacking the other economic problems which the war has left us.

We need only glance at a newspaper today, or step into a corner grocery, or fall into conversation with our neighbor in the train to have this topic come out as foremost in interest. It is, I believe, responsible for much more of our present uncertainty and confusion than is usually realized. In its ramifications it is chiefly this phase of the war's effects which, as I suggested above, touches every one of us at every point of our lives. A member of the Federal Reserve Board has called the price level problem the central economic problem of reconstruction.

Professor William Graham Sumner, who has inspired so many to the scientific study of social conditions, used to say: "In taking up the study of any social situation, divide your study into four questions—(1) What is it? (2) Why is it? (3) What of it? (4) What are you going to do about it?"

Let us follow this outline, and look first at the facts of the case; secondly at their causes; thirdly at the evils involved; and lastly at the remedies.

MEASURING CHANGES IN PRICES

We now possess a device for measuring the average change in prices. This is what is known as an "index number."

Thus, if one commodity has risen 4 per cent. since last month and another, 10 per cent., the average rise of the two is midway between the sum of 4 per cent., and 10 per cent., or 7 per cent. It is

4 + 10          
————  =  7
2    

If we call the price level of the two articles last month 100 per cent., then 107 per cent. is the "index number" for the prices of the two articles this month. The same principle, of course, applies to any number of commodities.

The index number of the United States Bureau of Labor Statistics, the best index number we have, shows an average price level in 1918 of 196 for

wholesale prices and 168 for retail prices of food on the basis of 100 per cent. for 1913, the year before the war; showing that wholesale prices, on the average, almost exactly doubled. The latest index number for wholesale prices (May, 1919) is 206, and for retail (July, 1919), 190.

A look at the history of prices shows the interesting fact that, while prices have sometimes fallen, they have generally risen. The high cost of living has been for centuries a source of complaint. In the 16th century, people objected to the price of wheat, which was three to ten times what it cost during the preceding 300 years.

WORTHLESS PAPER MONEY

Where, through ignorance of monetary science, irredeemable paper money was used, prices have sometimes gone up quite "out of sight." This was the case with the famous assignats of the French Revolution, and the "Continental" paper money of our own Revolution. After the Revolution a barber in Philadelphia is said to have covered the walls of his shop with continental paper money, calling it the cheapest wallpaper he could get! Jokes were also heard of a housewife taking a market-basket full of this "money" to the butcher's shop and bringing home the meat in her purse! This money became a hissing and a byword; and, even to this day, one of the favorite expressions for worthlessness is "not worth a Continental." We see the same situation repeated again today with Russian paper money.

But our first scientific measurement of price movements began with 1782, the beginning of Jevons' index number of wholesale prices in England.

COMMENTS ON FIGURE 1

Figure 1 shows the course of prices in England from that date, and also, for comparison, that in the U.S.